Aging Edge

Trying to grasp import of the predicted Social Security increase

About $28 a month more for the average Social Security recipient. That’s what they can expect in January, as an increase from the average annual monthly check today of $1,253 for retirees.

That’s not a ton — it’s really nothing, considering the whole point of the increase is simply to keep up with inflation by what’s known as a COLA (cost of living adjustment). And even that premise is questionable, considering that inflation tied to older adults’ interests is generally higher than the general Consumer Price Index, due to seniors’ disproportionately heavy spending on medications and other rising health care costs.

But $28 is $28 — maybe an annual weekly trip to a movie matinee, for the senior cinephile who somehow finds something worth attending amid the glut of superheroes, animated features for kids or car chase adventures.

Or it could be three more lunches out a month at your Denny’s/King’s/Eat‘n Park type restaurant.

Or a decent bottle of red wine — maybe an Alterra Cabernet Sauvignon North Coast — purchased every other week from the local state store for long life and good health.

Or for a once-a-month day trip to the hinterlands, go ahead and fill up the gas tank and drive that Buick with the windows down and the wind rushing through your hair at 55 mph. (Though you might be unlikely to do that around Western Pennsylvania in January.)

Whatever you use it for, the pending increase announced by the Social Security Board of Trustees feels like more welcome news than increases of less than 1 percent — if anything — in most recent years. They give advance notice each summer of the anticipated increase while also updating the status of the often-discussed — but rarely addressed — long-term shortfall in national Social Security and Medicare funding.

Social Security is supposedly solvent through 2034 and Medicare through 2029, if nothing is changed. After those years, there are deficits that could deny the current level of benefits to future recipients. That prospect always brings about hand-wringing over what to do now, with politicians rarely agreeing on anything except that it would be a good idea to leave it to future politicians to decide, once there’s more of a crisis at hand.

Fisher Investments, an independent financial adviser, tried to sum things up calmly in this online analysis on the website thestreet.com. It was headlined “Why You Shouldn’t Buy Into the Alarmist Hype About Social Security.”

The analysis noted that even though many Americans fear they won’t ever receive Social Security benefits, the trust fund wouldn’t really go bankrupt all of a sudden in 2034. There would still be funds, just not at the current level. And lots of changes could come in the meantime without political intervention, such as Americans deciding to work longer. But regardless, when things seemed really bad with the trust funds in prior years, Congress took action.

“That doesn’t mean reforms are coming soon, of course,” the analysis conceded. “But with such a huge constituency behind Social Security, reforms are highly likely to occur long before a crisis hits.”